-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L6lP3qak4w/wbHbbzgBih8A8TgsHrFH+/KYt4huSVN/hWfYITXsrHRfsIU5vI433 8J+jBbGIF8QGLQbplqVNcQ== 0001157523-07-011038.txt : 20071108 0001157523-07-011038.hdr.sgml : 20071108 20071108161549 ACCESSION NUMBER: 0001157523-07-011038 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071108 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071108 DATE AS OF CHANGE: 20071108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNOT INC CENTRAL INDEX KEY: 0001062292 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-NONSTORE RETAILERS [5960] IRS NUMBER: 133895178 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28271 FILM NUMBER: 071225998 BUSINESS ADDRESS: STREET 1: 462 BROADWAY 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 2122198555 MAIL ADDRESS: STREET 1: 462 BROADWAY, 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10013 8-K 1 a5541635.txt THE KNOT, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 8, 2007 The Knot, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 0-28271 13-3895178 (State or other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) 462 Broadway, 6th Floor, New York, New York 10013 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (212) 219-8555 --------------------- (Former name or former address, if changed since last report) --------------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. Results of Operations and Financial Condition. On November 8, 2007, The Knot, Inc. ("The Knot") issued a press release announcing its financial results as of and for the quarter ended September 30, 2007. A copy of The Knot's press release announcing these financial results is attached as Exhibit 99.1 hereto, and is incorporated by reference into this report. The information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) that is furnished pursuant to this Item 2.02 shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a) (2) of the Securities Act of 1933, as amended. The information contained in this Item and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any filing of The Knot, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing. Item 9.01. Financial Statements and Exhibits. (d) Exhibits 99.1 Press Release dated November 8, 2007. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE KNOT, INC. (Registrant) Date: November 8, 2007 By: /s/ RICHARD E. SZEFC ------------------------------- Richard E. Szefc Chief Financial Officer EXHIBIT INDEX 99.1 Press Release dated November 8, 2007. EX-99.1 2 a5541635ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 The Knot Reports Third Quarter 2007 Financial Results Online Advertising and Registry Services Continue to Lead Revenue Gains Conference Call Today at 4:30 p.m. ET Dial-In 800-638-7172 (ID#19425939) NEW YORK--(BUSINESS WIRE)--Nov. 8, 2007--The Knot, Inc. (NASDAQ: KNOT, www.theknot.com), a leading lifestage media company targeting couples planning their weddings and future lives together, today reported financial results for its third quarter and nine months ended September 30, 2007. Third Quarter 2007 Results For the third quarter ended September 30, 2007, The Knot reported net revenues of $25.0 million, an increase of 35% from net revenues of $18.5 million for the third quarter of 2006. Revenue from national and local online advertising programs increased 32% over the prior year's third quarter. Merchandise revenue from the sale of wedding supplies grew 24% while publishing and other revenue was down by 7%. Registry services revenue, which is derived substantially through the WeddingChannel business that was acquired in September 2006, was $3.7 million in the recent quarter. Income before income taxes increased to $5.2 million in the third quarter of 2007 compared to $3.4 million a year ago. The provision for income taxes was $2.3 million in the third quarter of 2007 and $90,000 in the corresponding period in 2006. The provision for income taxes for the third quarter 2006 was reduced by the utilization of net operating loss carryforwards. Net income for the third quarter of 2007 was $2.9 million or $0.09 per basic and diluted share as compared to net income of $3.3 million or $0.12 per basic and $0.11 per diluted share in the third quarter of 2006. "With the combination of The Knot, WeddingChannel and the rest of our lifestage brands, we continue to hold a dominant market share of a very valuable and highly targeted consumer group," said Chief Executive Officer David Liu. "The fundamentals of our business remain strong, and we are currently making investments in the technology and the talent that will ensure our ability to grow the business in the long term." Nine Month Results For the nine months ended September 30, 2007, The Knot reported net revenues of $74.5 million and net income of $9.3 million or $0.30 per basic and $0.28 per diluted share as compared to net revenues of $51.0 million and net income of $8.8 million or $0.36 per basic and $0.33 per diluted share in 2006. Income before income taxes was $16.1 million for the first nine months of 2007 and $9.2 million in the corresponding period in 2006. The number of common shares outstanding were 31,502,968 and 30,972,265 as of September 30, 2007 and 2006, respectively. Third Quarter 2007 Financial Highlights: -- National online revenues were $4.5 million and $12.9 million, for the three and nine months ended September 30, 2007, respectively, as compared to $3.6 million and $9.3 million for the corresponding periods in 2006. -- Local online revenues were $7.9 million and $22.7 million for the three and nine months ended September 30, 2007, respectively, as compared to $5.8 million and $16.3 million for the corresponding periods in 2006. -- Gross profit margins for the nine months ended September 30, 2007 were 81% as compared to 78% for the corresponding period in 2006. -- Stock-based compensation expense was $626,000 and $1.7 million for the three and nine months ended September 30, 2007, respectively, as compared to $388,000 and $1.1 million for the corresponding periods in 2006. -- Operating expenses for the three and nine months ended September 30, 2007 include a non-cash goodwill impairment charge of approximately $496,000 related to The Knot's GreatBoyfriends.com business unit. -- Net cash provided by operating activities was $22.0 million for the nine months ended September 30, 2007 while capital expenditures amounted to $2.3 million for the same period. Recent Highlights: -- In October, Janet Scardino was named President and Chief Marketing Officer of The Knot, Inc. She is responsible for developing and overseeing The Knot's business, including content, marketing and e-commerce, across the Company's brands. -- In September, a suite of enhancements were implemented on TheNest.com, the Company's popular lifestyle website and the go-to advice resource for a vast and loyal community of couples in their 20s and 30s who are building and organizing their lives together. -- In August, TheKnot.com and WeddingChannel.com launched BridesDecide.com. On BridesDecide.com, visitors can compare where presidential candidates stand on different issues, easily find voting information, and also share their thoughts with other brides and newlyweds via the online message board community. Conference Call and Replay Information The Knot will host a conference call with investors at 4:30 p.m. ET on Thursday, November 8, 2007 to discuss its third quarter 2007 financial results. Participants should dial in 800-638-7172 Reference # 19425939 at least 10 minutes before the call is scheduled to begin. Participants can also access the live broadcast over the Internet on the Investor Relations section of The Knot Web site, accessible at www.theknot.com/investor-relations. To access the webcast, participants should visit The Knot website at least 15 minutes prior to the conference call in order to download or install any necessary audio software. A replay of the webcast will also be archived on The Knot website approximately two hours after the conference call ends for a period of two weeks and will also be available at 800-642-1687 Reference #19425939. About The Knot, Inc. The Knot (NASDAQ: KNOT; www.theknot.com) is a leading lifestage media company. The Company's flagship brand, The Knot, is the nation's leading wedding resource, reaching well over a million engaged couples each year through the #1 wedding website TheKnot.com. Other Knot brand products include The Knot national and local magazines, The Knot books (published by Random House and Chronicle) and television programming bearing The Knot name (aired on the Style Network, Oxygen and Comcast Networks). The Company also owns WeddingChannel.com, the most visited wedding gift registry website. The Company's Nest brand focuses on the newlywed-to-pregnancy lifestage, with the popular lifestyle website TheNest.com, a home decor book series with Clarkson Potter, The Nest magazine and baby offshoot TheNestBaby.com. Also under The Knot, Inc. umbrella are WeddingTracker.com; GiftRegistryLocator.com; party planning site PartySpot.com; teen-oriented PromSpot.com; and local baby services and community site Lilaguide.com. The Knot, Inc. is based in New York and has several other offices across the country. This release may contain projections or other forward-looking statements regarding future events or the future financial performance of The Knot. These statements are only predictions and reflect the current beliefs and expectations of The Knot. Actual events or results may differ materially from those contained in the projections or forward-looking statements. It is routine for internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which The Knot bases its expectations may change prior to the end of the quarter. Although these expectations may change, The Knot will not necessarily inform you if they do. The Knot's policy is to provide its expectations not more than once per quarter, and not to update that information until the next quarter. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation, (i) The Knot's unproven business model and limited operating history, (ii) The Knot's history of losses, (iii) risks related to The Knot's recent acquisition of WeddingChannel, (iv) the significant fluctuation to which The Knot's quarterly revenues and operating results are subject, (v) the seasonality of the wedding industry and (vi) other factors detailed in documents The Knot files from time to time with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. The Knot, Inc. Consolidated Balance Sheets (in thousands) September 30, December 31, 2007 2006 (Unaudited) (Audited) -------------- ------------ -------------- ------------ Current assets: Cash and cash equivalents $20,565 $73,633 Short-term investments 80,841 7,000 Accounts receivable, net 13,386 9,743 Inventories 2,241 1,345 Deferred production and marketing costs 551 584 Deferred tax assets, current portion 5,041 8,369 Other current assets 1,490 1,500 -------------- ------------ Total current assets 124,115 102,174 Property and equipment, net 7,911 9,376 Intangible assets, net 31,891 34,015 Goodwill 32,763 33,854 Deferred tax assets 20,683 24,490 Other assets 342 342 -------------- ------------ Total assets $217,705 $204,251 ============== ============ Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $6,776 $7,661 Deferred revenue 13,843 10,498 Current portion of long-term debt 51 51 -------------- ------------ Total current liabilities 20,670 18,210 Deferred tax liabilities 14,157 15,014 Long term debt 55 55 Other liabilities 477 548 -------------- ------------ Total liabilities 35,359 33,827 Stockholders' equity: Common stock 315 311 Additional paid-in-capital 191,534 188,909 Accumulated deficit (9,503) (18,796) -------------- ------------ Total stockholders' equity 182,346 170,424 -------------- ------------ Total liabilities and stockholders' equity $217,705 $204,251 ============== ============ The Knot, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, ----------------------- ----------------------- 2007 2006 2007 2006 ----------- ----------- ----------- ----------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net revenues: Online sponsorship and advertising $12,394 $9,380 $35,692 $25,533 Registry Services 3,666 955 8,783 1,098 Merchandise 5,317 4,273 16,447 12,166 Publishing and other 3,632 3,898 13,603 12,190 ----------- ----------- ----------- ----------- Total net revenues 25,009 18,506 74,525 50,987 Cost of revenues 4,394 4,200 14,061 11,388 ----------- ----------- ----------- ----------- Gross profit 20,615 14,306 60,464 39,599 Operating expenses: Product and content development 3,487 2,170 9,937 5,784 Sales and marketing 6,230 4,657 18,568 13,740 General and administrative 4,399 4,233 12,471 10,820 Goodwill impairment 496 - 496 - Depreciation and amortization 2,079 975 6,384 1,800 ----------- ----------- ----------- ----------- Total operating expenses 16,691 12,035 47,856 32,144 Income from operations 3,924 2,271 12,608 7,455 Interest and other income, net 1,273 1,082 3,496 1,745 ----------- ----------- ----------- ----------- Income before income taxes $5,197 $3,353 $16,104 $9,200 Provision for income taxes 2,299 90 6,811 366 Net income $2,898 $3,263 $9,293 $8,834 =========== =========== =========== =========== Basic earnings per share $0.09 $0.12 $0.30 $0.36 =========== =========== =========== =========== Diluted earnings per share $0.09 $0.11 $0.28 $0.33 =========== =========== =========== =========== Weighted average number of common shares outstanding Basic 31,034,101 27,472,080 30,915,579 24,592,760 =========== =========== =========== =========== Diluted 32,767,237 29,766,300 32,786,345 27,059,012 =========== =========== =========== =========== CONTACT: VMW Corporate & Investor Relations Vicki Weiner/Sylvia Dresner, 212-616-6161 info@vmwcom.com -----END PRIVACY-ENHANCED MESSAGE-----